Tax

Have a Tax Question? Ask a Tax Expert

Ask an Expert,
Get an Answer ASAP!

Tax

I am receiving a canadian inheritance soon and want to pay

Customer Question
I am an american citizen...
I am an american citizen living in florida and I will be receiving a  canadian inheritance soon and want to pay off my mortgage in florida. I am canadian citizen and also usa citizen. Can I pay off my mortgage from my residence in florida without paying taxes to the usa? Jill thanks... 
Submitted: 5 years ago.Category: Tax
Show More
Show Less
Ask Your Own Tax Question
Answered in 11 minutes by:
2/1/2012
Tax Professional: Robin D., Senior Tax Advisor 4 replied 5 years ago
Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 16,277
Experience: 15years with H & R Block. Divisional leader, Instructor
Verified

Robin D :

Hello and thank you for using Just Answer
If the inheritance you are anticipating is going to be money then you will not pay tax in the US on the infheritance. If yo are inheriting property or an account and then will sell or receive a distribution of the inheritance paying off your mortgage will not prevent you from taxation on the sale or the account distributions to you.

Robin D :

If you receive property and it is transferred to your name before you sale you will be allowed the basis of the Fair Markert Value on date of death. This may result in a gain or a loss for you when you sale.

Robin D :

If you inherit an accout it will be taxable to you if the money in the account was never taxed when contributions were made to the account.

Customer:

I will receive 100,00.00 in the form of a bank draft into a canadian bank account that I already have established I want to simply have the canadian bank issue the money straight toward my suntrust bank account who also holds my mortgage Is there any problems with this that you may forsee. The money is from guaranteed investment certificates which all taxes have already been paid on.

Robin D :

If you received the certificates then you will need to report the transaction on your US return. If the amount is not over $100,000 then you would not be required to use Form 3520 but you do need to report the account on Form 90-22.1 (F-BAR) because the amount is over $10,000 in a foreign bank account (not in US).
It will not matter if you payoff your mortgage, any tax to US on the receiving of the certificates will still need to be shown on your US return but you can use the Foreign Tax credit to show the Canadian tax (I am assuming) that was paid.

Robin D :

I will need to check on the certificate tax situation for US, one sec

Robin D :

OK, quick crash course on those. You would show the GIC as interest. Like a US Certificate of Deposit.

Robin D :

Only the interest earned will be taxable to US not the entire amount. The foreign tax credit will show the tax already paid in Canada

Customer:

so when do i show the foreign tax credit, when I pay my taxes that year or when I pay off the mortgage with that money?

Robin D :

With your tax return

Robin D :

It is Form 1116

Robin D :

It would reduce any US tax based on the amount paid in Canada

Robin D :

Mke sur eyou report the foreign bank account on 90-22.1

Robin D :

Make sure *sorry

Customer:

do you think i will have to pay any taxes then?

Robin D :

Canada and US are very close in taxation. Ususally if the foreign tax paid is not as much as the US tax that would be owed then you pay the difference. It will all come down to your total income for the year and how much interest was in that $100,000 also.

Robin D :

Remeber though, you only add the interest not the $100,000

Customer:

yes but it is an inheritance money from my moms death in canada?

Robin D :

It is not the inheritance that you are taxed on, it is the earned amount that your mother woudl have had

Robin D :

I understand, I can just advise you about the uS taxation on you as a US citizen and the property you have inherited.

Customer:

it is money that was already taxed and paid for in canada from my mother. roughly then how much money will i have to pay then when I do the income tax keepingin mind i am paying off my mortgage with the 100,00.00 and nothing will be left.

Robin D :

Your mortgage payoff has no play in your taxation for this. Interest is just added to your other income and then your regular deductions and credits apply. I cannot even give you an estimate because it would require doing your entire retrun, I don't know what all you have ,don't know the interest amount, don't know how much Canadian tax you paid on the interest already,....
I could go on and on but basically I cannot give an estimate based on your information.

Robin D :

I hope you can agree though that I addressed your initial question and have explained all your tax reporting obligation

Customer:

Thank you Robin. Jill.

Robin D :

You are welcome. You can always come back even after you click ACCEPT

Customer:

ok.

Robin D :

.

Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 16,277
Experience: 15years with H & R Block. Divisional leader, Instructor
Verified
Robin D. and 87 other Tax Specialists are ready to help you
Ask your own question now
Ask Robin D. Your Own Question
Robin D.
Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 16,277
16,277 Satisfied Customers
Experience: 15years with H & R Block. Divisional leader, Instructor

Robin D. is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response...

T.G.WMatteson, IL

I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight.

BonnieChesnee, SC

Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation.

JohnMinneapolis, MN

Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with.

OrvilleHesperia, California

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!!

AlexLos Angeles, CA

Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult.

GPHesperia, CA

< Previous | Next >

Meet the Experts:

Wallstreet Esq.

Wallstreet Esq.

Tax Attorney

586 satisfied customers

10 years experience

Mark D

Mark D

Enrolled Agent

1,312 satisfied customers

MBA, EA, Specializing in Business and Individual Tax Returns and Issues

Richard

Richard

Tax Attorney

4,362 satisfied customers

29 years of experience as a tax, real estate, and business attorney.

Robin D.

Robin D.

Senior Tax Advisor 4

16,277 satisfied customers

15years with H & R Block. Divisional leader, Instructor

Megan C

Megan C

Certified Public Accountant (CPA)

8,652 satisfied customers

Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

jgordosea

jgordosea

Enrolled Agent

2,885 satisfied customers

I've prepared all types of taxes since 1987.

R. Klein, EA

R. Klein, EA

Enrolled Agent

1,839 satisfied customers

Over 20 Years experience

< Previous | Next >

Related Tax Questions
My question is: Is the foreign tax credit 100% Offset to the
Hi, my question is: Is the foreign tax credit 100% Offset to the Alternative Minimum Tax, if there are only foreign income? … read more
Robin D.
Robin D.
Senior Tax Advisor 4
16,277 satisfied customers
I recently sold a property. When I inherited it from my
I recently sold a property. When I inherited it from my mother, I had to pay inheritance tax on it at a value of $137,000 ten years ago. The property recently sold for $80k. Can I deduct the loss in v… read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,811 satisfied customers
What are the forms for reporting Rental Income to the IRS on
What are the forms for reporting Rental Income to the IRS on foreign properties - we collect each month? Is this filed separately from our personal returns?… read more
Chad EA, CFP ®
Chad EA, CFP ®
IRS Enrolled Agent, CFP(R),
Master\u0027s Degree
1,095 satisfied customers
Tax Question. TX. Inherited $82k 401k. Decedent was not
Tax Question. TX. Inherited $82k 401k. Decedent was not retirement age.What is the tax implication if the $82k 401k is cashed by a 81yr old on $1550 Monthly SS as only income? What is the tax implicat… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
Is inheritance income from Germany subject to US taxes?
Is inheritance income from Germany subject to US taxes? … read more
Chad EA, CFP ®
Chad EA, CFP ®
IRS Enrolled Agent, CFP(R),
Master\u0027s Degree
1,095 satisfied customers
Inherited property in 2014 and sold it in 2016. I have
Inherited property in 2014 and sold it in 2016. I have questions about filing the estate's taxes as well as how to report the capital loss on my personal taxes … read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,811 satisfied customers
Can I report rental income in my tax return on a property
Can I report rental income in my tax return on a property thar is owned by my father? He does not live in the US is not a US citizen and can sign a document to allow me to receive the rental… read more
Robin D.
Robin D.
Senior Tax Advisor 4
16,277 satisfied customers
Under the IRC, a taxpayer who inherits property gets an
Under the IRC, a taxpayer who inherits property gets an automatic, income-tax-free, step-up in basis for that asset. That is, the heir uses the property's value on the deceased's date of death (or 6 m… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
For the purpose of IRS form 3520 line 54 can an estate
For the purpose of IRS form 3520 line 54 can an estate account be a person 'related to' my brother? For example, if I received money from an estate account from my father in Canada as part of a will a… read more
Robin D.
Robin D.
Senior Tax Advisor 4
16,277 satisfied customers
Form 3520- Received a bequest from a foreign Estate. Besides
Form 3520- Received a bequest from a foreign Estate. Besides my personal info, what other info, if any, goes on page 1 … read more
Robin D.
Robin D.
Senior Tax Advisor 4
16,277 satisfied customers
Help with Form 3520. Form 3520 - Need to know what line
Form 3520 - Need to know what line items to fill for having received a cash gift from a foreign citizen … read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,811 satisfied customers
Would it be correct to report a foreign cash inheritance as
would it be correct to report a foreign cash inheritance as an initial and final on form 3520? bequest, no trust, will require FBAR now and for some years but the 3520 is mny concern … read more
abci168
abci168
Principal
27 satisfied customers
I was unaware of requirement to file Form 3520. I received
Hello:I was unaware of requirement to file Form 3520. I received cash gifts from foreign persons (parents) in 2016. I have not been contacted by IRS; have no previous under or unreported tax liabiliti… read more
Robin D.
Robin D.
Senior Tax Advisor 4
16,277 satisfied customers
Is not knowing you need to file a form 3520 for foreign
Is not knowing you need to file a form 3520 for foreign gifts enough to establish reasonable cause? Plan to voluntarily disclose after finding out the requirement. I did my taxes myself on Turbo Tax, … read more
Mark Taylor
Mark Taylor
Certified Public Accountant
Masters
2,282 satisfied customers
I am looking at the form 1116 (foreign tax credit). I have
I am looking at the form 1116 (foreign tax credit). I have paid $30,000 in taxes in the UK (I live all year here), the US tax says line 22 on the form can only be 21,000. Where do I report the carry o… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
I have to use form 1116 for a foreign tax credit line 14
I have to use form 1116 for a foreign tax credit line 14 code B the amount is 108, I got to putting in the country which is various, where do I put the 108 … read more
Anne
Anne
Master Tax Preparer
1,328 satisfied customers
Form 3520. I received a cash inheritance from my mother who
Form 3520. I received a cash inheritance from my mother who lived in Canada. I will fill out 3520 general section and part IV line 54. Couple of questions. … read more
TaxWhisperer
TaxWhisperer
Principal
Master's Degree
24 satisfied customers
RE Form 1116 provision for adjustment of foreign qualified
RE Form 1116 provision for adjustment of foreign qualified dividends:I have foreign sourced qualified dividends (QD) from 4 different countries in excess of 30K. Form 1116 requires adjusting the amoun… read more
Dr Arthur Rubin
Dr Arthur Rubin
Doctoral Degree
24 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Show MoreShow Less

Ask Your Question

x